The Week Ahead – Private Sector PMIs, COVID-19, and Central Bank Commentary in Focus

On the Macro

It’s a relatively busy week ahead on the economic calendar, with 54 stats in focus in the week ending 26^th March. In the week prior, 53 stats had been in focus.

For the Dollar:

It’s a busy week ahead.

The markets will have to wait until Wednesday, however, for core durable goods and prelim private sector PMIs.

While core durable goods orders will influence, prelim March Services PMI figures will be the key driver.

The focus will then shift to finalized 4^th quarter GDP and initial jobless claim figures on Thursday.

Expect the jobless claims to have the greatest impact. Powell and team have already talked up the economic recovery for 2021.

At the end of the week, inflation and personal spending figures for February wrap things up.

Other stats in the week include housing sector, trade, and finalized consumer sentiment figures. We don’t expect too much influence from the numbers, however.

On the monetary policy front, FED Chair Powell is in action through the first half of the week.

A scheduled speech on Monday precedes two days of testimony on Tuesday and Wednesday. Expect any deviation from last week’s script to influence.

In the week ending 19^th March, the Dollar Spot Index rose by 0.26% to 91.919.

For the EUR:

It’s a busier week ahead on the economic data front.

After a quiet start, prelim private sector PMI figures for France, Germany, and the Eurozone will be in focus on Wednesday.

While Germany’s manufacturing PMI will be the key driver, service sector PMIs will also influence.

Late in the day on Wednesday, Eurozone consumer confidence figures for March will also draw attention.

On Thursday and Friday, consumer confidence and business confidence figures from Germany are due out.

From the ECB, the Economic Bulletin on Thursday will also draw plenty of attention. The markets will be looking for any shift in the ECB’s outlook on the economic recovery.

On the monetary policy front, ECB President Lagarde is also scheduled to speak on Thursday. With climate change the topic, however, any talk on monetary policy is unlikely.

The EUR ended the week down by 0.41% to $1.1904.

For the Pound:

It’s a particularly busy week ahead on the economic calendar.

In the first half of the week, employment, inflation, and prelim private sector PMIs will be in focus.

Expect claimant counts, the service sector PMI, and inflation to draw plenty of interest.

At the end of the week, February retail sales figures will wrap things up. Another dive in spending would pressure the Pound.

On the monetary policy front, BoE Governor Bailey speaks in the week. Following last week’s unanimous vote to hold policy unchanged, any hawkish chatter should support the Pound.

The Pound ended the week down by 0.37% to $1.3872.

For the Loonie:

It’s a particularly quiet week ahead on the economic calendar. There are no material stats to provide the Loonie with direction.

For the Loonie, the lack of stats will leave crude oil inventories and market risk sentiment to provide direction.

BoC Governor Macklem is also scheduled to speak. Any surprise talk of a shift in policy would impact the Loonie.

The Loonie ended the week down 0.20% to C$1.2500 against the U.S Dollar.

Out of Asia

For the Aussie Dollar:

It’s a particularly quiet week.

There are no material stats to provide the Aussie Dollar with direction. The lack of stats will leave the Aussie Dollar in the hands of private sector PMIs from Europe and the U.S.

The Aussie Dollar ended the week down by 0.28% to $0.7742.

For the Kiwi Dollar:

It’s yet another quiet week ahead.

Economic data is limited to February trade data due out on Wednesday.

Following impressive numbers from China, the markets will be looking for strong exports to China.

Expect disappointing numbers to test Kiwi Dollar support.

From elsewhere, prelim private sector PMIs from Europe and the U.S will also influence.

The Kiwi Dollar ended the week down by 0.15% to $0.7165.

For the Japanese Yen:

It is relatively quiet week ahead.

Mid-week, prelim private sector PMIs for March are due out. Expect the manufacturing numbers to draw the greatest interest.

At the end of the week, March inflation figures for Tokyo will likely have a muted impact on the Yen and market risk sentiment.

The Japanese Yen rose by 0.14% to ¥108.88 against the U.S Dollar.

Out of China

It’s a quiet week ahead, with no material stats due out of China to provide the broader markets with direction.

While there are no stats, the PBoC is in action on Monday, though loan prime rates are likely to be left unchanged.

The Chinese Yuan ended the week down by 0.01% to CNY6.5090 against the U.S Dollar.

Geo-Politics

U.S Politics

Talks with China have resumed, which will bring chatter from both sides to the forefront from a market perspective.

Economic data from China has continued to impress and global trade terms will need to continue improving to support a more sustained global economic recovery.

Relations between China and the rest of the world will therefore need to materially improve to support this.

EU Politics

Some EU member states have resumed vaccinations with the AstraZeneca vaccine. Tensions between Britain and the EU remain, however.

The continued blocking exports of the vaccine from EU member states to non-EU countries could become a greater concern.